You Can Brew Beer At Home But Not Whiskey. The Court Said That’s Absurd.

Consider a man in Fort Worth who enjoys woodworking on weekends. He builds furniture in his garage, sells a few pieces at a local market, and pays income tax on the proceeds. Now imagine Congress passed a law declaring that no one may operate a woodworking shop “in any dwelling house, or in any shed, yard, or enclosure connected with any dwelling house,” backed by a penalty of up to $10,000 in fines and five years in federal prison. The stated justification? Woodworking generates taxable income, and Congress wants to make sure it can collect that income tax efficiently. The prohibition, lawmakers explain, is merely an adjunct to the tax.

You would rightly find this absurd. Banning an activity to make it easier to tax that activity is not a method of tax collection. It is the negation of tax collection. It is the destruction of the very economic event that produces the revenue. Yet for more than 150 years, this precise logic sustained one of the most peculiar provisions in the Internal Revenue Code: the federal prohibition on distilling spirits in or near a private residence, codified at 26 USC § 5178(a)(1)(B) and enforced as a felony under 26 USC § 5601(a)(6). On April 10, 2026, a panel of the Fifth Circuit finally said what should have been obvious for generations. The ban is unconstitutional.

The case is McNutt v. U.S. Department of Justice, No. 24-10760, and the published opinion deserves serious attention not merely for what it does to the home-distilling ban, but for what it says about the structural limits of federal power. The panel, consisting of Judges Edith Hollan Jones, James E. Graves Jr., and Joseph H. Rodriguez sitting by designation, held that Congress’s taxing power, even when supplemented by the Necessary and Proper Clause, does not authorize a categorical prohibition on private conduct simply because that conduct could generate taxable revenue. The reasoning is careful, historically grounded, and, in my view, correct.

To understand why the court reached the right result, one must first understand where the ban came from. Its origin is not some grand public safety initiative. It is a Reconstruction-era tax enforcement measure, born in the chaotic aftermath of the Civil War when the federal government desperately needed revenue and moonshiners in Appalachia and the rural South were evading excise taxes on spirits with considerable success. The precursor appeared in a mid-19th century internal revenue statute that barred distilling on certain premises, including “any dwelling-house,” with penalties of forfeiture, a $1,000 fine, or imprisonment up to one year. The key text the Fifth Circuit treated as the direct ancestor of the modern ban is Section 12 of the Act of July 20, 1868, which extended the prohibition to “any shed, yard, or enclosure connected with any dwelling-house” and increased the penalty to a $1,000 fine and six months to two years imprisonment.

The logic of the 1868 statute was straightforward. If a still was hidden in a man’s home or barn, revenue officers could not easily find it, inspect it, or measure its output. Concealment made tax evasion practical. Congress therefore decided that the simplest solution was to forbid the placement of stills in or near residences altogether, forcing all distilling into commercial premises where inspectors could enter “at all times, as well by night as by day,” to examine equipment, gauge production, and account for every drop. The ban on residential distilling was, in other words, a convenience for the tax collector, not a protection for the public.

This context matters because the government’s entire defense of the statute rested on a single claim: Congress enacted the ban as an adjunct to its taxing power, and the Necessary and Proper Clause authorizes incidental regulations that protect tax collection. The Fifth Circuit accepted the premise but rejected the conclusion. The panel drew a sharp distinction between regulations that facilitate the collection of a tax and regulations that prevent the taxable activity from occurring in the first place. A requirement that distillers register their stills facilitates tax collection. A requirement that distillers keep records of their output facilitates tax collection. A requirement that distillers allow inspectors onto their premises facilitates tax collection. But a flat prohibition on distilling in or near a home does not facilitate tax collection at all. It eliminates the production of taxable spirits. No production means no tax. The regulation does not serve the tax; it destroys the tax base.

This distinction may seem technical, but it carries enormous structural weight. The Necessary and Proper Clause authorizes Congress to pass laws that are “necessary and proper for carrying into Execution” its enumerated powers. Since McCulloch v. Maryland, the operative standard has been whether a means is “plainly adapted” to a legitimate end and “consistent with the letter and spirit of the constitution.” The Fifth Circuit concluded that a blanket prohibition on home distilling fails both requirements. It is not plainly adapted to collecting the spirits excise because it prevents spirits from being made. And it is not consistent with the spirit of a constitution that grants Congress only enumerated powers, because the government’s rationale has no limiting principle.

That last point deserves emphasis. The panel pressed the government to explain what would stop Congress, under the same theory, from banning any private activity that generates (or could generate) taxable revenue, on the ground that banning it makes the tax easier to administer. Could Congress ban home gardening because produce sales generate income that is hard to track? Could Congress prohibit freelance tutoring because cash payments are difficult to audit? The government had no satisfying answer. Every limiting principle it proposed either proved too narrow to encompass the home-distilling ban itself or too broad to serve as an actual constraint. The panel correctly recognized that a theory of federal power with no internal limit is not a theory of enumerated power at all. It is a general police power, which the Constitution does not grant to the federal government.

Moreover, the absurdity of the ban becomes vivid when compared to what federal law actually allows. Since the late 1970s, Congress has explicitly permitted home production of wine and beer for personal or family use, without payment of federal excise tax, subject to modest volume limits. The relevant provisions are 26 USC § 5042 for wine and § 5053(e) for beer. These exemptions acknowledge a simple reality: Americans can make fermented beverages at home without threatening the republic. The same Congress that blessed home brewing of beer and winemaking, however, left home distilling subject to a felony penalty of up to $10,000 in fines and five years in prison. The asymmetry is not merely odd. It is irrational. The processes differ in technique, of course. Distillation concentrates alcohol rather than merely fermenting it. But the federal prohibition is not based on safety concerns about the distillation process. It is based on the location of the still relative to a dwelling. A person who operates a fully registered, federally qualified distilled spirits plant on commercial premises is perfectly legal. The same person performing the identical activity in a shed behind his house commits a felony. The distinction tracks geography, not danger.

One might object that distillation involves genuine safety risks, primarily the production of flammable vapors and the possibility, if done carelessly, of methanol contamination. These are real concerns. But they are concerns that states have always been empowered to address through their general police powers, and many states do regulate or prohibit home distilling through their own alcohol control laws. The question before the Fifth Circuit was not whether home distilling should be legal everywhere and under all circumstances. It was whether the federal government has the constitutional authority to criminalize it as an exercise of the taxing power. The answer, after McNutt, is no.

The implications of this holding extend well beyond whiskey. The Fifth Circuit’s reasoning reinforces a principle that has animated constitutional law since the founding: the federal government is a government of limited, enumerated powers, and the Necessary and Proper Clause is not a blank check. Congress cannot bootstrap a prohibition of private conduct onto the taxing power by claiming that the prohibition makes tax collection easier, particularly when the prohibition eliminates the very activity that generates the tax. This logic, if taken seriously, would discipline an increasingly common pattern in federal regulation, where Congress uses its acknowledged authority over one domain as a springboard to assert control over adjacent domains that it could not regulate directly.

The opinion is also notable for what it did not do. The panel took care to distinguish its holding from a broader attack on the federal regulatory architecture for distilled spirits. It did not strike down the requirement that distillers register with the Alcohol and Tobacco Tax and Trade Bureau. It did not invalidate the bonding and qualification requirements for distilled spirits plants. It did not eliminate the federal excise tax on spirits. It did not declare that Americans have an unqualified right to produce whiskey in their kitchens without any federal oversight. What it did was far more precise: it held that Congress may not use the taxing power to impose a categorical, location-based ban on production, enforced by felony penalties, when that ban does not facilitate tax collection but instead prevents it. The narrowness of the holding is a feature, not a bug. It allows the existing federal tax-and-regulation framework to continue operating while removing a single provision that overstepped constitutional bounds.

Of course, the decision’s practical effect is not unlimited even within its own terms. State law remains a decisive constraint in most jurisdictions. The National Conference of State Legislatures has documented the wide variation in state rules on home manufacture of alcoholic beverages, and many states prohibit home distilling independently of federal law. A Texan who reads the McNutt opinion and fires up a pot still in his garage may find that he has solved his federal problem only to create a state one. Moreover, the federal requirement that all distilled spirits production occur at a registered, qualified distilled spirits plant under 26 USC § 5171 and related provisions remains in force. The practical path to lawful home distilling, even after McNutt, likely requires either a legislative carve-out analogous to the beer and wine exemptions or a regulatory accommodation from TTB that defines a simplified home-production registration framework.

The government’s next moves are predictable. Because the United States is a party, Federal Rule of Appellate Procedure 40 allows 45 days (rather than the usual 14) to seek panel rehearing or rehearing en banc. If rehearing is denied, the certiorari clock under Supreme Court Rule 13 resets from the date of that denial, giving the Solicitor General 90 days to petition for review. Along the way, the government may seek a stay of the mandate under FRAP Rule 41, which would freeze the practical effect of the decision while further review is pursued. Whether the Supreme Court ultimately takes the case may depend on whether other circuits reach the same conclusion or whether a circuit split develops. The Fifth Circuit noted that related litigation is proceeding in at least one other circuit, which suggests the issue may ripen for certiorari sooner rather than later.

But whatever happens at the next stage of litigation, the Fifth Circuit has already accomplished something important. It has forced the federal government to confront a question it has avoided for more than a century: if the purpose of the home-distilling ban is to collect taxes, why does the ban prevent the very production that would generate tax revenue? The government’s inability to answer that question coherently is not a failure of lawyering. It is a reflection of the fact that the ban never made sense as a tax measure. It made sense as a police measure, designed to suppress an activity that Congress found inconvenient to regulate. But the federal government does not possess a general police power. That power belongs to the states. The Fifth Circuit, in McNutt, simply held Congress to the limits of the authority it actually has.

There is a deeper point here that transcends the specific controversy over home distilling. The American constitutional order is built on the premise that government power must be justified, not assumed. When Congress acts, it must point to an enumerated power. When it claims a means is necessary and proper, that means must bear a real, functional relationship to the enumerated end. A law that destroys the tax base in the name of tax collection is not necessary. A theory of federal power with no limiting principle is not proper. The Fifth Circuit’s opinion in McNutt is a reminder that these are not abstract slogans. They are operative constraints, enforceable in court, and they protect the liberty of every American who believes that the government should have to explain itself before it sends someone to prison for five years.

The sculptor holds up her work and asks: is this a tax regulation or a criminal prohibition masquerading as one? After 158 years, a federal court has finally given the honest answer.

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